22 November 2008

Energy Prices may remain unchanged after all

Price increases for the supply with gas and electricity, which had been expected in January, are now unlikely to go ahead. This is - after all the bad and gloomy news of this week - at last a positive turn of events.

Following significant falls in fossil fuel prices on the world markets, the Electricity Supply Board (ESB) and Bord Gáis have said that the price increases they both have sought from the Commission for Energy Regulation "may now not be necessary".

Yesterday the price for oil has reached a three-year low of $ 48.25 a barrel. Which means that crude oil is now trading at levels not seen since May 2005, and it costs almost $ 100 a barrel less than in July, when the price peaked at $ 147.27 per barrel. (A 'barrel', the old-fashioned unit of measurement still used by the US-dominated oil industry, equals 159 litres.)

Because of the global recession, the International Energy Agency (IEA) says that world oil demand will rise at its slowest pace for 23 years this year.

The price of natural gas has meanwhile fallen by 60% from the peak it reached earlier this year.

Bord Gáis sought the Energy Regulator's permission to increase its prices by 4.2% only three weeks ago, which would have added about €3 a month to the average household bill. (see my entry of November 4th)
This application for a price rise is still pending with the Regulator, who can accept or reject it. In light of the drastic price reductions on the international energy markets Bord Gáis should now withdraw the application without further delay.

The Emerald Islander

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